Mohkam Singh supplied 22 buffalo carts of cane, each laden with 18 quintals, to the sugar mill at Shamli belonging to Sir Shadi Lal Enterprises Ltd in the 2015-16 crushing season. These 400 quintals should have fetched about Rs 1.12 lakh at the Uttar Pradesh government’s state advised price (SAP) of Rs 280 per quintal.

But all that this 17-bigha (2.9 acres) farmer from Kheri Bairagi village of Shamli tehsil has got so far, even after the mill stopped crushing on April 17, is Rs 44,000.

The 70-year-old’s main worry is about his grandson and granddaughter, who are studying in class VII and class IX, respectively, at a private school in Shamli town. Their combined monthly fee of Rs 3,000, inclusive of school-bus charges, hasn’t been paid since March.

Mohkam Singh is just one of Shamli’s 76,500-odd farmers who delivered 193.11 lakh quintals of cane to the district’s three mills – which also include Bajaj Hindusthan’s Thanabhawan and Rana Sugars Ltd’s Unn units — in the last sugar season.

This total sugarcane was worth Rs 538.46 crore at the official SAP, whereas the three mills together have up to now disbursed only Rs 240.70 crore. That works out to nearly Rs 300 crore dues for a single district.

Shamli lies in western UP’s Upper Doab region, the fertile alluvial tract between the Ganga and Yamuna that is synonymous with sugarcane cultivation. (Source: Express photo by Parveen Khanna)

This region is currently in the news for BJP MP Hukum Singh’s allegations of an exodus of Hindu families from Muslim-majority areas like Kairana and Kandhla — The Indian Express had reported that those who left did so years ago for better job opportunities and education.

“The SAP has been unchanged at Rs 280/quintal since 2012-13 and we are not getting even that. The palayan (exodus) is only intended to divide and divert from the real problem of bhugtan (cane payment). It’s being done now, as the timing — when crushing is over and before Assembly elections early next year — suits both mill-owners and politicians,” said Jitender Singh Hooda, who farms 45-bigha (7.6 acres) in the same village and has received Rs 1.44 lakh for his 1,200 quintals supplied to the Shamli mill, as against its SAP value of Rs 3.36 lakh.

Shamli lies in western UP’s Upper Doab region, the fertile alluvial tract between the Ganga and Yamuna that is synonymous with sugarcane cultivation. “Ours is the top district in cane productivity. But unfortunately, we are also now topping in cane payment arrears,” said Hooda.

He isn’t wrong. For 2015-16, Shamli’s average cane yield of 807.76 quintals per hectare, based on official crop cutting experiment data, was not just higher than the 665 quintal figure for the entire state, but even that of neighbouring districts like Saharanpur (667.48), Muzaffarnagar (759.40), Baghpat (770.32) and Meerut (794.68).

However, while mills in the latter districts have paid between 56 to 72 per cent of the SAP value of cane purchased, the ratio is below 45 per cent for Shamli.

“Unko toh paisa rokne ki aadat ban gayi hai (They’ve got used to blocking our money). Farmers are today borrowing money to make ends meet, while mills are getting cane on credit at zero interest from us,” alleged Jagmer Singh Nirwal, who holds the state record of harvesting 1,989.5 quintals per hectare in the 2014-15 season.

Owning 300 bigha (50.5 acres) in Shamli’s outskirts, half of it planted to cane, Nirwal and his three brothers delivered around 8,000 quintals worth over Rs 22 lakh to the Shamli factory. But even they have received only about Rs 4 lakh and haven’t got anything for cane supplies after January 15.

It’s not farmers alone, who are affected. “This district’s whole economy revolves around cane. If farmers aren’t paid, it impacts their spending and, in turn, our incomes as well,” said Sonu Sangal, a third-generation provision store owner in Shamli’s Mill Road, who claims his daily sales in cash is today barely a tenth of the Rs 30,000-40,000 it used to be till three years ago.

“This phenomenon of delayed cane payments has been going on since 2013-14. Initially, farmers were using Kisan Credit Card (KCC) money, meant for purchase of seed, fertiliser, chemicals and other agricultural inputs, to meet household expenses. But they have exhausted that option and are living hand to mouth,” said Amit Bansal, who has a shop in the same street hawking Patanjali Ayurved’s herbal products. His business, too, is down 40 per cent over last year.

Shamli’s primarily agrarian economy, currently in deep crisis mode, is also reflected in its banks.

Public sector, private and cooperative banks had outstanding advances of Rs 2,224.77 crore as on March 31 in the district, of which Rs 1,617.56 crore or 73 per cent was to agriculture. Within that, Rs 1,304.69 crore represented loans taken against KCC, a facility to meet short-term credit requirements for crop cultivation. Under it, sugarcane farmers can borrow up to Rs 1.40 lakh for every hectare of land owned, while being eligible to a concessional interest rate of 7 per cent. The subsidised credit is subject to a Rs 3 lakh limit and also the farmer repaying the borrowed amount with interest within a year. This money he needs to, however, deposit with the bank for only 24 hours before it can be withdrawn again.

But Shamli’s farmers, it seems, are unable to renew their KCC accounts within the due dates. Y P S Panwar, a consultant with Punjab National Bank’s financial literacy and credit counselling centre here, estimates that 55-60 per cent of agricultural loans in the district have turned “irregular”. Farmers earlier often borrowed from each other to park the required sums for 24 hours just to maintain their KCC limits-cum-interest subsidy eligibility.

“But when no one is getting paid for their crop, who do you borrow from? There was a time when farmers used to come running to pay up when banks used to send overdue notices even by ordinary post. But today, they know nobody has money and there’s no point trying to save face,” said Panwar.